Nasheed: Laying off resort workers under current circumstances is irresponsible

Parliament Speaker, former President Mohamed Nasheed, on Tuesday, said that while he acknowledged the severe impact the COVID-19 pandemic was having on the tourism sector, implementing disproportionate cost-cutting measures such as laying off resort workers was irresponsible.

At the parliamentary sitting on Tuesday morning, Nasheed said he has been informed of many resort operators making abrupt decisions to cut salaries of resort workers or send them home on no-pay leave.

He said that resorts and guesthouses had paid MVR 1.2 billion as Goods and Services Tax (GST) so far this year, and that resort and guesthouse operators had suffered hits to revenue only during the past 15 days, at the most.

“This means that resorts generated MVR 10.1 billion in revenue up until March 15,” said Nasheed.

He said that businesses had not been so deeply hit as to warrant laying off workers.

He said that MVR 850 million had been paid as Business Profit Tax so far this year, and that the figure was not a major drop compared to the same period last year.

“This means business hasn’t gone down yet. I know business may go down in the days to come. But I believe harming employees and cutting their salaries claiming business is down right now are not the actions of a person who is responsible,” said Nasheed.

He said that laying off workers should only be used as a last resort.

Implementing cost-cutting measures disproportionate to the fall in income of businesses is irresponsible, he said.

“Cost-cutting measures need to be implemented with wisdom, or cost-cutting should be proportionate to the fall in revenue. The revenue of resorts has not fallen to this level. This is evident on based on the tax revenue,” said Nasheed.

He urged businesses to bring out their profits and reserves and inject it into the economy to aid in overcoming the current economic challenges.

“And I think everyone wants how they inject it into the economy to be by paying their workers,” said Nasheed.

Nasheed’s remarks comes after Villa Hotels & Resorts, one of Maldives’ largest resort operators, pn Monday, announced the decision to temporary close all its tourist properties, with the exception of Paradise Island Resort.

Villa is now closed to any new bookings, except for Paradise, and plans on transferring its existing bookings at other resorts to Paradise in the coming days.

It will close down its other resorts following the departure of its existing guests.

Villa has instructed its resort workers to clear their leaves. While workers haven’t been expressly asked to take no-pay leave, Sun has been informed the company will send its workers home on no pay-leave once the two-week restriction on travel between resorts and residential islands is lifted.

The move had come less than a week after it issued a circular, signed by Managing Director Siyad Qasim, informing its employees of salary cuts within the range of 10 to 50 percent.